UPDATE 1-Quintain says trading tough, to withhold dividend

(adds details)

LONDON Aug 5 (Reuters) - Regeneration specialist Quintain Estates & Development (QED.L) said on Tuesday it would withhold dividends for up to two years to defend its business from significant worsening in Britain's sagging property market.

In its first quarter interim management statement for the three months to end-June, the company said it had kick-started a cash conservation programme to help it withstand tougher trading conditions and exploit investment opportunities likely to emerge from the current market malaise.

It also said it was looking to raise additional equity to help fund development plans around England's Wembley National Stadium in north London.

"Conditions continue to prove challenging and are likely to remain so throughout the financial year," said Chief Executive Adrian Wyatt.

"The board has adopted measures that will protect Quintain's interests should a further significant decline occur," Wyatt said.

Average UK commercial property prices have tumbled by around 20 percent since the collapse of Britain's real estate market starting in June 2007.

The company said its gearing as at June 2008 was 64 percent, within loan covenant requirements of 110 percent.

It said it had curtailed its development pipeline to only four sites in a bid to manage development risk and reduce costs, delaying the construction of more than 1,000 homes at Greenwich Peninsula, south of the river Thames in London, and Wembley.

Quintain said it continued to make progress on a 136,000 square foot office development scheme pre-let to Transport for London (TfL) at Greenwich Peninsula. (Reporting by Sinead Cruise, editing by Will Waterman) (See www.reutersrealestate.com for the global service for real estate professionals from Reuters)